Small Business Management Study Questions - Ch 7 The Marketing Plan PDF

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Small Business Management 18e Longenecker
Chapter 7 - The Marketing Plan
Study Questions - T/F and Mult. Choice
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Small Business Management Study Questions

Chapter 7—The Marketing Plan TRUE/FALSE 1. Small business marketing is best defined as the performance of distribution activities that affect the flow of goods and services from producer to consumer or user. ANS: F Small business marketing involves numerous activities, many of which occur even before a product is created or made ready for distribution or sale. PTS: 1 REF: p. 200 NAT: Communication | Value Creation

OBJ: 7-1 TYPE: D

2. In order to achieve market success, a firm should concentrate on either providing an excellent product and/or service or devising an insightful marketing strategy. ANS: F As suggested by the consumer-oriented philosophy, a firm must also pursue customer satisfaction if it is to be successful. PTS: 1 REF: p. 201 NAT: Communication | Value Creation

OBJ: 7-1 TYPE: C

3. Regardless of the type of business, the consumer-oriented marketing philosophy is the best choice among the competing alternatives. ANS: T PTS: 1 NAT: Ethics | Value Creation 4.

REF: p. 201

OBJ: 7-1 TYPE: C

A marketing philosophy that originates with consumer needs is market-oriented.

ANS: F It is a consumer-oriented marketing philosophy that begins with customer needs. PTS: 1 REF: p. 201 NAT: Ethics | Value Creation

OBJ: 7-1 TYPE: D

5. In a small business, the entrepreneur's marketing philosophy typically shapes the firm's marketing activities. ANS: T PTS: 1 NAT: Ethics | Value Creation 6.

REF: p. 201

OBJ: 7-1 TYPE: C

Customer satisfaction is not the means to achieving a certain goal—it is the goal.

ANS: T

PTS: 1

REF: p. 202

OBJ: 7-1 TYPE: C

NAT: Communication | Value Creation 7. Because many small business owners have strong production skills, they often attend mostly to the marketing side of the business to compensate. ANS: F Many small business owners have strong production skills and are weak in marketing ability, and therefore they attend primarily to production considerations. PTS: 1 REF: p. 201 NAT: Communication | Dynamics 8.

OBJ: 7-1 TYPE: C

A detailed analysis of competitors is an important part of a firm's formal marketing plan.

ANS: T PTS: 1 NAT: Communication | Value Creation

REF: p. 203

OBJ: 7-2 TYPE: C

9. Because of the costs involved, it is typical for a business to formulate only a single sales forecast. ANS: F Typically, the sales forecast is a composite of several sales forecasts that are merged together. PTS: 1 REF: p. 204 NAT: Communication | Finance

OBJ: 7-2 TYPE: C

10. If an entrepreneur anticipates several target markets, each individual segment must have its own corresponding customer profile. ANS: T PTS: 1 NAT: Communication | Value Creation

REF: p. 203

OBJ: 7-2 TYPE: C

11. The marketing strategy section provides the most detailed information in a formal marketing plan. ANS: T PTS: 1 NAT: Communication | Value Creation

REF: p. 205-206

OBJ: 7-2 TYPE: C

12. Researchers typically achieve higher response rates from mail and telephone surveys than from personal interviews. ANS: F Personal interviews and telephone surveys typically achieve higher response rates than mail surveys. PTS: 1 REF: p. 214 NAT: Communication | Value Creation

OBJ: 7-2 TYPE: C

13. If an entrepreneur is using their last name in the company’s name, they do not need register the name with local, state and federal agencies. ANS: F Company names should always be registered with the appropriate agencies for protection from use by another company. PTS: 1

REF: p. 207

OBJ: 7-2 TYPE: C

NAT: Communication | Ethical and Legal 14. Microsoft’s programming that operates Windows would be considered intellectual property. ANS: T PTS: 1 REF: p. 207 NAT: Communication | Ethical and Legal

OBJ: 7-2 TYPE: A

15. Marketing research is an effective supplement, but not a replacement, for the intuitive judgment of entrepreneurs. ANS: T PTS: 1 NAT: Communication | Value Creation

REF: p. 216

OBJ: 7-3 TYPE: C

16. Marketing research is defined as the gathering, processing, reporting, and interpreting of marketing information. ANS: T PTS: 1 NAT: Communication | Value Creation

REF: p. 209

OBJ: 7-3 TYPE: D

17. Small businesses typically conduct less marketing research than big businesses, partly because they lack an understanding of the basic marketing research process. ANS: T PTS: 1 NAT: Communication | Value Creation

REF: p. 209

OBJ: 7-3 TYPE: C

18. Because of the considerable cost, time, and effort, pre-testing is generally considered necessary only in the case of extensive, complex questionnaires. ANS: F A questionnaire should be pre-tested by administering it to a small, but representative, sample of respondents. PTS: 1 REF: p. 215 NAT: Communication | Data Analysis

OBJ: 7-3 TYPE: C

19. Personal interview surveys are attractive as a marketing research method because these are inexpensive to conduct. ANS: F Personal interview surveys are expensive, especially compared to alternatives such as mail and telephone surveys. PTS: 1 REF: p. 214 NAT: Communication | Data Analysis

OBJ: 7-3 TYPE: C

20. Small business owners can now buy inexpensive personal computer software that can perform statistical calculations and generate report-quality graphics. ANS: T PTS: 1 NAT: Technology | Data Analysis 21.

REF: p. 215

OBJ: 7-3 TYPE: C

It is best to write a marketing plan before collecting marketing research data.

ANS: F A marketing plan is stronger with marketing research as a foundation.

PTS: 1 REF: p. 209 NAT: Communication | Data Analysis

OBJ: 7-3 TYPE: C

22. A market is best defined as a geographical area that is of commercial interest to the entrepreneur. ANS: F A market is a group of customers or potential customers who have purchasing power and unsatisfied needs. PTS: 1 REF: p. 216 OBJ: 7-4 TYPE: D NAT: Communication | Economic Environments 23. Determining market potential is the process of locating and investigating buying units that have purchasing power and needs that can be satisfied with the product and/or service being offered. ANS: T PTS: 1 NAT: Communication | Data Analysis

REF: p. 217

OBJ: 7-4 TYPE: C

24. When a strategist divides the total market for a product and/or service into groups with similar needs, so that each group is likely to respond to the same marketing strategy, he or she is engaging in a practice called market segmentation. ANS: T PTS: 1 NAT: Communication | Value Creation

REF: p. 217

OBJ: 7-4 TYPE: D

25. A buildup process requires a small business to identify all potential buyers in a target market's submarkets and then combine these estimates to determine the calculated demand. ANS: T PTS: 1 NAT: Communication | Data Analysis

REF: p. 223

OBJ: 7-4 TYPE: C

26. Because of the relatively inconsequential amount of sales conducted by a typical small business, the majority of entrepreneurs need not be concerned with formulating accurate sales forecasts. ANS: F A sales forecast is a critical component of the business plan: therefore, entrepreneurs should engage in forecasting and do so with great care. PTS: 1 REF: p. 221 NAT: Communication | Data Analysis

OBJ: 7-5 TYPE: C

27. A small business can determine whether a market is adequate for its plans by checking the sales forecast. ANS: T PTS: 1 NAT: Communication | Data Analysis 28.

REF: p. 221

OBJ: 7-5 TYPE: C

Sales forecasts are typically expressed in dollars or units.

ANS: T PTS: 1 NAT: Communication | Data Analysis

REF: p. 221

OBJ: 7-5 TYPE: C

29. Because sales forecasts revolve around specific target markets, the market should be defined as precisely as possible. ANS: T PTS: 1 NAT: Communication | Data Analysis

REF: p. 221

OBJ: 7-5 TYPE: C

30. The forecasting process can be characterized by the point at which the process is started and the nature of the predicting variable. ANS: T PTS: 1 NAT: Communication | Data Analysis

REF: p. 223

OBJ: 7-5 TYPE: C

31. A chain-ratio method of sales forecasting, or a buildup process, is frequently used for consumer products forecasting. ANS: F Another term for the chain-ratio method of sales forecasting is the breakdown process, not the buildup process. PTS: 1 REF: p. 223 NAT: Communication | Data Analysis

OBJ: 7-5 TYPE: C

MULTIPLE CHOICE 1. Small business marketing involves a number of activities, including a. creating, developing, preparing, communicating, and delivering a bundle of satisfaction to a target market. b. planning for optimal production efficiency. c. identifying alternative technologies. d. establishing a sales-oriented marketing philosophy. ANS: A PTS: 1 NAT: Communication | Value Creation 2. a. b. c. d.

REF: p. 202

OBJ: 7-1 TYPE: D

Traditionally, marketing philosophies have been categorized as consumer-oriented and market-oriented. consumer-oriented, product-oriented, market-oriented, and volume-oriented. consumer-oriented, market-oriented, sales-oriented, and process-oriented. consumer-oriented, production-oriented, and sales-oriented.

ANS: D PTS: 1 NAT: Ethics | Value Creation 4. a. b. c. d.

OBJ: 7-1 TYPE: C

A firm's marketing mix consists of ____ activities. pricing, promotion, and distribution product, pricing, and promotion product, promotion, and distribution product, pricing, promotion, and distribution

ANS: D PTS: 1 NAT: Communication | Value Creation 3. a. b. c. d.

REF: p. 200

REF: p. 201

OBJ: 7-1 TYPE: C

U.S. businesses have recently shifted their focus toward a ____ orientation. market consumer production sales

ANS: B PTS: 1 REF: p. 201 NAT: Communication | Economic Environments

OBJ: 7-1 TYPE: C

5. A firm's marketing philosophy determines how strategic marketing activities are used to achieve a. efficiency. b. customer response. c. desirable thought patterns. d. business goals. ANS: D PTS: 1 NAT: Ethics | Value Creation 6. a. b. c. d.

REF: p. 201

In recent years, the emphasis in U.S. businesses has been on consumers. production. sales. time-honored values.

ANS: A PTS: 1 REF: p. 201 NAT: Communication | Economic Environments 7. a. b. c. d.

OBJ: 7-1 TYPE: C

OBJ: 7-1 TYPE: C

The ____ marketing philosophy is the preferred approach for all businesses. product-oriented market-oriented sales-oriented consumer-oriented

ANS: D PTS: 1 NAT: Ethics | Value Creation

REF: p. 201

OBJ: 7-1 TYPE: C

8. Every day, associates of Sewell Motors, a Dallas-based auto retailer, strive to exceed the company's expectations of treating the customer as its number one priority. Every action, policy, and ultimate sale is conducted professionally, with consumers' needs in mind. Sewell Motors subscribes to the ____ marketing philosophy. a. consumer-oriented b. market-oriented c. sales-oriented d. product-oriented ANS: A PTS: 1 NAT: Communication | Value Creation

REF: p. 201

OBJ: 7-1 TYPE: A

9. Creators Plus, a modest-size manufacturer of quality crafts, expends considerable resources to ensure that its products are created in the most efficient manner. According to the owner, distribution and promotion are secondary considerations to managing an expedient production process. Creators Plus subscribes to the ____ marketing philosophy. a. process-oriented b. market-oriented c. sales-oriented d. production-oriented ANS: D PTS: 1 NAT: Communication | Value Creation

REF: p. 201

10. The consumer-oriented approach to marketing a. is just one more business philosophy. b. focuses on “pushing the product”.

OBJ: 7-1 TYPE: A

c. recognizes first and foremost the need for attaining production efficiency goals. d. is the recommended philosophy for all types of businesses. ANS: D PTS: 1 NAT: Ethics | Value Creation

REF: p. 201

OBJ: 7-1 TYPE: C

11. The decision to produce flavored spring water ice cubes in response to requests from its customers reflects Norway Ice Company’s ____ marketing philosophy. a. production-oriented b. sales-oriented c. consumer-oriented d. response-oriented ANS: C PTS: 1 NAT: Ethics | Value Creation

REF: p. 201

OBJ: 7-1 TYPE: A

12. Koldpak has focused principally on the development of revolutionary new ways of containerizing fresh produce for grocery stores. The firm’s marketing philosophy is a. consumer-oriented. b. market-oriented. c. production-oriented. d. sales-oriented. ANS: C PTS: 1 NAT: Ethics | Value Creation 13. a. b. c. d.

REF: p. 201

OBJ: 7-1 TYPE: A

Adopting a consumer-oriented marketing philosophy is most consistent with quickly gaining highly profitable market returns. eventually achieving long-term market success. the revenue stabilizing effect of large market shares. focusing on the single most profitable consumer segment.

ANS: B PTS: 1 NAT: Ethics | Value Creation

REF: p. 201-202

OBJ: 7-1 TYPE: C

14. In preparing a sales forecast, it is desirable to have forecasts covering the “most likely”, “best case” and “_____ case” scenarios. a. rapidly shifting b. pessimistic c. predominant d. worse ANS: D PTS: 1 NAT: Communication | Data Analysis

REF: p. 204

OBJ: 7-2 TYPE: C

15. Irene, owner of a small retail shop, is evaluating her customer profile. Which item is the most critical for her for her customer profile? a. the financial ratios to see how much her product costs the customer b. whether the marketing research was completed with primary or secondary information c. the customer benefits to verify they are consistent with the customer needs d. the customer demographics to determine new customers ANS: C PTS: 1 NAT: Communication | Value Creation

REF: p. 203

OBJ: 7-2 TYPE: A

16. In the analysis of a market, the customer profile should include a a. description of consumer weaknesses. b. summary of production plans. c. a detailed discussion of major customer benefits provided by the product and/or service.

d. a profile of major markets not targeted. ANS: C PTS: 1 NAT: Communication | Value Creation 17. a. b. c. d.

REF: p. 203

OBJ: 7-2 TYPE: C

The market analysis section of the marketing plan should include sales options. a customer profile. a statement of marketing tendencies. a summary of market philosophies.

ANS: B PTS: 1 NAT: Communication | Value Creation

REF: p. 203

OBJ: 7-2 TYPE: D

18. Spira Footwear, Inc. produces running and walking shoes with a patented technology. Therefore the company’s profile should concentrate the most on a. the features the shoes offer the customer. b. the uniqueness of the product. c. the benefits to the customers. d. All of the above are equally important. ANS: C PTS: 1 NAT: Communication | Value Creation 19. a. b. c. d.

REF: p. 205

OBJ: 7-2 TYPE: C

The most detailed and scrutinized section of a formal marketing plan is the competitor analysis. marketing strategy. market analysis. consumer analysis.

ANS: B PTS: 1 NAT: Communication | Value Creation 21. a. b. c. d.

OBJ: 7-2 TYPE: A

Which discussion should not be included in the competitor analysis of a marketing plan? competitor's strengths and weaknesses a list of related products currently being marketed or tested by competitors the likelihood that competitors will enter the firm's target market the competitiveness of plans such as warranty and repair policies

ANS: D PTS: 1 NAT: Communication | Value Creation 20. a. b. c. d.

REF: p. 203

REF: p. 206

OBJ: 7-2 TYPE: C

The areas of marketing strategy that should be addressed within the marketing plan are promotional, pricing, distribution, and product and/or service plans. promotional and pricing plans. promotional and distribution plans. promotional, pricing, and distribution plans.

ANS: A PTS: 1 NAT: Communication | Value Creation

REF: p. 206

OBJ: 7-2 TYPE: C

22. John, a car repair shop owner, is developing the warranty and repair policies for his business. What area of the marketing strategy is he addressing? a. Promotional plan b. Product and/or Service plan c. Distribution plan d. Pricing plan ANS: B

PTS: 1

REF: p. 207

OBJ: 7-2 TYPE: A

NAT: Communication | Value Creation 23. a. b. c. d.

The description of potential customers in a target market is commonly called a customer profile. demographic detailing. Simpkins matrix. target picture.

ANS: A PTS: 1 NAT: Communication | Value Creation 24. a. b. c. d.

OBJ: 7-2 TYPE: C

In considering its marketing strategy a new venture will typically concentrate on mass marketing a multi-segmented market a select few target markets or just one the Internet.

ANS: C PTS: 1 NAT: Communication | Value Creation 25. a. b. c. d.

REF: p. 203

REF: p. 204

OBJ: 7-2 TYPE: C

At minimum, the price of a product and/or service must cover the cost of bringing it to market. must demonstrate a substantial profit. must be at or below the competition. must be based exclusively on a break-even analysis.

ANS: A PTS: 1 NAT: Communication | Value Creation

REF: p. 208

OBJ: 7-2 TYPE: C

26. The section of the marketing plan which describes the entrepreneur’s approach to creating customer awareness of the product or service is the a. product and/or service section. b. promotion section. c. distribution section. d. pricing section. ANS: B PTS: 1 NAT: Communication | Value Creation

REF: p. 209

OBJ: 7-2 TYPE: D

27. If a firms method of product delivery is exportation, which topic is not an important area to discuss in the distribution section of the marketing strategy? a. Relevant laws concerning exportation b. Product presentation c. Knowledge of exchange rates between currencies d. Relevant regulations concerning exportation ANS: B PTS: 1 REF: p. 208 NAT: Communication | Economic Environments 28. a. b. c. d.

OBJ: 7-2 TYPE: C

The initial step in the marketing research process is to select a data collection method. identify consumer/business segments of interest. identify informational needs. conduct a preliminary information search.

ANS: C PTS: 1 NAT: Communication | Value Creation

REF: p. 211

OBJ: 7-3 TYPE: C

29. To determine credit card average purchases, managers of Component City Stereo and Appliances reviewed credit card sales receipts from the previous three months. Managers are conducting marketing research by collecting and analyzing a. primary data. b. observational data. c. questioning data. d. secondary data. ANS: D PTS: 1 NAT: Communication | Data Analysis

REF: p. 213

OBJ: 7-3 TYPE: A

30. Which observational method has gained increased use with small business owners recently? a. Web surveys b. Twitter c. Mystery Shopp...